While U.S. pork producers have shown good restraint by not increasing their herd size, the same cannot be said for Canadian producers. Estimates are for growth there to be 8 percent to 10 percent this year.
U.S. farrowing intentions for both spring and summer are 1 percent larger than last year. "U.S. breeding herd and farrowing estimates, combined with a small productivity increase, imply modest year-to-year slaughter increases during the rest of 2002," says Kansas State University agricultural economist James Mintert.
That's the good news– now for the bad.
Pork production in Canada has jumped dramatically in recent years. For example, sow farrowings rose about 30 percent from 1998 to 2002. During that same time, the United States has seen an influx of Canadian live hogs and weaned pigs enter the United States. Most recently, the weaned pigs have started to outpace the market hogs as U.S. producers like what they've seen, which has resulted in long-term business arrangements between some producers in the two countries.
"From 1995 to 2001, hog imports from Canada to the United States tripled, reaching 5.34 million head in 2001," says Minert. "Fifty-nine percent of U.S. hog imports during 2001 were feeder pigs."
Continued live-hog and pig exports from Canada into the United States could pressure slaughter capacity here this fall. It will be a hold-your-breath-and-pray scenario. At the same time, in a remarkable move, the Canadian pork industry and government have told the National Pork Producers Council they will help the United States manage hog slaughter this fall. To what degree remains to be seen. That country is still very pessimistic in terms of the U.S. psuedorabies control and eradication program.
One long-term unanswered question that's new to the scene involves the potential impact of the Farm Bills' country-of-origin labeling provision on meat. While specific details of the regulation are a long way off, early indications are that it will require animals to be born, raised and slaughtered in the United States to be label as U.S. product. That will create a problem for U.S. packers, which in turn will present a problem producers finishing out weaned pigs from Canada. It also could hurt the United States in trade negotiations and lead to costly retailiations.
The key will be whether the regulation will include traceability and enforcement provisions. Both factors are likely because some farm and consumer groups won't let that slip by. It could change the complexion of both industries in the future.
For now, here are some other current Canadian pork industry statistics worth noting:
- While, Canada's pork sector is growing rapidly, it is still much smaller than the U.S. industry. For example, Canada's first quarter 2002 pig crop was about one-fourth the size of the U.S. pig crop.
- The fall 2001 Canadian pig crop increased about 780,000 head, or 11 percent compared to fall 2000.
- During the first quarter of 2002, the Canadian pig crop grew another 598,000 head– 8 percent– compared with first quarter 2001.
- Canadian pork producers plan to increase second quarter 2002 farrowings by 11 percent compared to last year.
Kansas State University